HB510 Summary

• Increases participant contribution rate to the Birmingham pension system to 7.5 percent effective July 1, 2021, and requires city contributions to be determined by actuary to fully fund the system and amortize unfunded liability over a closed period not exceeding 30 years.

• Revises normal retirement eligibility for new participants (hired after July 1, 2021, excluding fire and police) to require either age 62 with 10+ years of service OR age 55 with 30+ years of service, reducing the normal retirement benefit formula from 2.25 percent to 1.75 percent of final average salary per year of credited service.

• Reduces maximum normal retirement benefit for new non-fire/police participants to 52.5 percent of final average salary, reduces ordinary disability allowance from 2 percent to 1.75 percent, and reduces early retirement benefit from 1.85 percent to 1.45 percent.

• Eliminates subsidized spousal survivor benefits for legally married participants hired after July 1, 2021, requiring participants to elect either a reduced retirement benefit with survivor protection or an unreduced benefit with no survivor benefit.

• Effective immediately upon passage and approval by the Governor.